'Spending money is not the only way to show you care about people'

The Obama administration has wasted little time in 2014 demanding an emergency extension of federal unemployment benefits with no spending cuts attached and questioning the compassion of those who don’t want to continue aid to struggling families, but a former chief economist for the Joint Economic Committee says it’s not the smart or compassionate thing to do.

Brian Wesbury has been an economist for 32 years, worked on Capitol Hill and is now chief economist at First Trust Advisors in Chicago. He told WND the economic history of the U.S. and the world is clear and stands in contrast to Obama’s contention that extending the benefits boosts the economy.

“Every dime that the government spends, no matter where it goes, those monies come from either borrowing or taxing from other people,” he explained. “So this idea that we can take from one group and give to another group and, therefore, help the economy has a serious flaw in the logic to begin with.

“I know what people will say. They’ll say, ‘Well, this guy doesn’t care about people.’ That’s not true. What I want to see is the best economic growth that we can have. What I know from looking at history is that the smaller the government is, that the more resources we leave in the private sector, the more the economy grows and the more jobs we create.”

Listen to WND’s interview with Westbury below:

Wesbury pointed to Germany as the only European nation to cut the size of it’s government and also witness a shrinking jobless rate.

“That’s what this debate is about,” he said. “Spending money is not the only way to show that you care about people. Unfortunately, in an emergency situation, then Washington just devolves into just another way to see who can spend the most and say they helped the people the most. In fact, at least in my view, history shows the more government spends, the less people are helped, not more.”

During his public push for extended benefits Tuesday, President Obama emphatically dismissed the notion that some people are in no hurry to accept new jobs because they would rather get money from the government for not working. Wesbury said there’s plenty of economic incentive for those on public assistance.

“I haven’t seen major macro data on this, but if people are looking at jobs in a factory, in a food plant or on a farm and they’re looking at $10 to $12 an hour in pay, but if the benefits you can get from the government are the equivalent of $14 to $15 an hour, then why would you take that job?” asked Wesbury, who says Europe has already proven this point.

“We saw this in Europe over the last 40 years, that they’ve made it literally almost painless to be without a job,” he said. “I know that sounds cold, but we’re looking at this from an economic point of view. If you subsidize something, you get more of it. If you tax something, you get less of it. What happened in Europe is they subsidized non-work and non-production and they taxed production. It hurt their economy. The United States has been moving in that direction for many years. No wonder our economy is slower. No wonder the unemployment rate is higher.”

The argument from supporters of the extension is that we are in an economic emergency, and continuing the benefits is needed in the short-term. Wesbury doesn’t buy the premise. While noting many have been hurt by it, he said the scope of the recent crisis has been exaggerated and politicians have exploited the situation.

“The 2008-2009 crisis doesn’t even come close to one of the worst crises in the world, but because it scared so many people, we’ve continued to call everything an emergency, whether it’s agricultural subsidies, defense spending or stimulus spending,” Wesbury said.

After initially demanding an end to the extended unemployment benefits in the recent budget deal, Republicans seem more intent on cutting spending elsewhere to pay for new benefits rather than hold the line on keeping the public assistance going in perpetuity.

“If Republicans are going to be forced to accept this, having to prove their empathy for people in doing this, then Democrats ought to be able to allow spending to be cut in some other area,” said Wesbury, who suggested ethanol subsidies as a good place to start.

So how does he explain the six Senate Republicans who went along with Democrats in approving an extension in unemployment benefits without any spending offsets?

“In an election year, votes in Congress are based on what people think will get them re-elected,” he said. “When it comes down to it, lots and lots of things that Congress does are not the most economically perfect kind of policies. There’s lots of things that government does that I believe hurt the economy but seem to win votes or be politically correct. That’s unfortunate because I think in the end that hurts the U.S. economy in the long run.”